Ivorian crisis not impacting cocoa supply, report
Exporters estimated around 65,000 tonnes of beans were transported to the two main ports between 27 and 31 December, compared with just 30,168 tonnes a year ago, according to Reuters.
However, companies told the wire service that if violence were to escalate, exports for the rest of the season could be at risk.
The Ivory Coast has been in turmoil since a November presidential runoff, an election that both candidates said they won.
The standoff has brought the country to the brink of renewed civil war. And other African leaders are due in Abidjan today in a bid to persuade incumbent leader Laurent Gbagbo to step down and cede power to his rival Alassane Ouattara, who has near unanimous international support.
Meanwhile, cocoa futures have pulled back from four-month highs hit last month following indicators that the political crisis in the West African state has not yet hit cocoa bean distribution.
Furthermore, Rabobank’s recently released outlook on the agri commodity markets for 2011 forecasts that cocoa prices will ease back from the current high levels.
The commodity experts predict that in 2011, the global cocoa market is going to be balanced between “much better supply” available due to plentiful rainfall in West Africa, and an “ambiguous political situation” in Ivory Coast.
“With a larger crop and only modest growth in use, we expect prices to fall in 2011, but upside potential remains strong due to the situation in Ivory Coast; if the flow of cocoa is constrained from the world’s number one producer, prices are expected to respond strongly to the upside.”
The analysts note that although the conflict in the West African region is predicted to increase the cost of cocoa, the bank said that a good supply in Ghana and “only lacklustre demand growth” expected in the US and the EU will be bearish for prices in the next 12 months.
The bank said demand for cocoa remains slow. North American grindings rose 1.7 per cent to 120,495 tonnes in the third quarter of 2010, while European grindings are 4 per cent lower to 331,182 tonnes.
“Lower demand is bearish for the market but prices rose nevertheless in the previous two seasons” said the analysts.
This was due to the lower cocoa production in West Africa; a result of damaging weather. However, improved output for the 2010/11 season due to plentiful La Niña-induced rainfall will “swing the world fundamental balance into surplus after two seasons of deficit”.
Furthermore, Rabobank said that recently released Ivory Coast data shows a surge of selling and increase in crops.
The analysts said that less smuggling through Ghana and stockpiling by growers have contributed to the surge in deliveries, which are now 412,00 tonnes since the season began in October, up 7.7 per cent from the same point in 2009/10.
